Fri. Mar 29th, 2024
China, India Driving Asian Economy Growth In 2023: Asian Development BankImage: Freepik

Asia will witness strong economic growth this year on the back of China letting go of strict pandemic curbs and strong domestic demand in India, the Asian Development Bank (ADB) has said.

Economies in Asia and the Pacific are likely to grow 4.8 percent in 2023 and 2024, higher than 4.2 percent last year, said ADB in its latest growth outlook.

The Mandaluyong headquartered development bank named China’s reopening as the main reason for the bright growth prospect of the region.

Improved consumption and investment underpin supporting factors for many regional economies, offsetting the impact of higher food and energy prices caused by the Russian invasion of Ukraine and other global headwinds. Also, tourism and remittances are adding life to tourism-dependent economies.

It also cautioned about the global outlook that must be “carefully monitored and proactively addressed”, including a prolongation or escalation of Russia-Ukraine tensions, rising interest rates, and increasing levels of debt.

China’s economy is on track to grow 5 percent this year and 4.5 percent the following year, said ABD.

China GDP Growth Forecast
Image: Asian Development Bank

The bank also underscored a strong economic ramp for India, with an estimated growth of 6.4 percent this year and 6.7 percent next year.
However, the World Bank has trimmed its forecast for India’s GDP growth from 6.6 percent to 6.3 percent in FY24, as it sees a fall in consumption due to slower income.

Indian Economy Growth Forecast
Image: Asian Development Bank

As per the Asian Development Bank (ADB), Inflation may come down to 4.2 percent in 2023 and 3.3 percent in 2024 after clocking 4.4 percent last year. Although, it has raised alarms for the core inflation to remain high in some economies and demands for close monitoring.

The bank said a factor working in the region’s favor is the expected cooling down in inflation, translating into lesser frequent and sizable interest rate hikes that dampen consumption.

“Prospects for economies in Asia and the Pacific are brighter, and they’re poised for a strong recovery as we return to normalization following the pandemic,” the Asian Development Bank (ADB) Chief Economist Albert Park said.

“People are starting to travel again for leisure and work, and economic activities are gathering pace. Because many challenges remain, governments in the region need to stay focused on policies that support stronger cooperation and integration to promote trade, investment, productivity, and resilience.”

Southeast Asian countries such as Indonesia, the Philippines, and Vietnam are also on the path to witness strong economic growth, with revamping tourism and robust domestic demand. The region’s economy is predicted to expand by 4.7 percent this year and 5 percent in 2024.

The Caucasus and Central Asia may mark an economic growth of 4.4 percent this year and 4.6 percent in 2024, while Pacific island economies could achieve 3.3 percent and 2.8 percent growth, respectively.

By Harshita Sharma

I bring to you updates from business, policy and economy spectrum.

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